Forced Arbitration Under Fire as Google Axes Policy

After months of tension between Google and its employees over the use of mandatory arbitration agreements, the tech giant announced Thursday that it will abandon the practice.

Starting March 21, the company will end all such existing agreements with current employees and will no longer require future hires to waive their right to seek legal action against the employer. The company's decision will not, however, allow past disputes to be reopened.

The move comes after Google ended its forced arbitration policy for sexual harassment and assault complaints last November. At that time, other major companies such as Facebook, eBay and Airbnb ended similar policies.

Mandatory arbitration and its use in the workplace

Mandatory arbitration agreements are legal contracts that stipulate that if an employee's rights are violated, they cannot seek action in court. Instead, both the employee and the employer submit to an arbitration procedure to privately settle the matter.

According to an April 2018 Economic Policy Institute report by Alexander J.S. Colvin, use of mandatory arbitration agreements has increased steadily since 1991. Colvin said the number of workers under such agreements ballooned from 2 percent in 1992 to nearly "a quarter of the workforce" by the early 2000s.

In the years since, Colvin's study reveals, mandatory arbitration agreements have been signed by more than 53.9 percent of America's nonunion private-sector employers. More than 56 percent of nonunion private-sector employees – approximately 60 million Americans – have signed such agreements.

In the report, Colvin says mandatory arbitration agreements have "weakened the position of workers whose rights are violated, barring access to the courts for all types of legal claims, including those based on Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the Fair Labor Standards Act."

Among the companies with mandatory arbitration agreements, more than 30 percent of them also require class-action waivers, meaning employees are unable to join forces to file a suit against any overarching rights violations. The study finds that 41 percent of employees working under mandatory arbitration – or approximately 23.1 million workers – are also unable to file class-action suits.

Colvin's study also revealed that among the employers requiring mandatory arbitration, low-wage workplaces, businesses comprising mostly women and "industries that are disproportionately comprised of African-American workers" are more likely to institute the practice.

A similar study by Professor Imre S. Szalai and social justice professor Judge John D. Wessel, both of the Loyola University New Orleans College of Law, highlights that of the 100 largest U.S. companies ranked by Forbes, 80 have used arbitration agreements for disputes since 2010. Nearly half of those companies also have class waivers in their arbitration clauses. More than half of the Fortune 100 have forced arbitration agreements.

Employees fight to restore their legal rights

The push to end mandatory arbitration agreements throughout the nation has been steadily gaining steam. Last February, all 50 state attorneys general signed a letter to Congress urging that legislation be drawn up to put an end to the practice.

"Victims of such serious misconduct should not be constrained to pursue relief from decision makers who are not trained as judges, are not qualified to act as courts of law, and are not positioned to ensure that such victims are accorded both procedural and substantive due process," they wrote.

Google also announced Thursday that it would extend its decision to end mandatory arbitration agreements to its contract workers. However, vendors that Google works with will not be required to change their agreements. The change also doesn't extend to other companies owned by Google's parent corporation, Alphabet.

Google employees have been sounding the alarm against forced arbitration agreements, specifically when they came to sexual misconduct cases, since last year. Last November, employees staged a global walkout for an hour.

"We commend the company in taking this step so that all its workers can access their civil rights through public court," they wrote. "We will officially celebrate when we see these changes reflected in our policy websites and/or employment agreements."

Six members of the Googlers for Ending Forced Arbitration group will go to Washington, D.C., on Thursday, Feb. 28 to "stand with Senators and House Representatives to introduce multiple bills that end the practice of forced arbitration across all employers."

"We're calling on Congress to make this a law to protect everyone," they said. "Today was a good day. Now keep going."

Andrew Martins

Andrew Martins is an award-winning journalist with a BA in journalism from Ramapo College of New Jersey. Before joining Business.com and Business News Daily, he wrote for a regional publication and served as the managing editor for six weekly papers that spanned four counties. He is a New Jersey native and a first-generation Portuguese-American, and he has a penchant for the nerdy.